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UPDATE: Since this article was first published on Monday morning, the office of Senate Finance Committee Chairman Spencer Bachus announced late Monday morning that the Finance Committee hearing on the deficit scheduled for Tuesday, June 7, was postponed-Ed.

The political theater in the ongoing debt-ceiling drama now playing in Washington will surely shift scenes, but the main act could as likely occur in Iowa or New Hampshire as the Senate Finance Committee or Vice President Joseph Biden’s office.

The Senate Finance Committee has scheduled a hearing at 10:00 AM on Tuesday, led by chairman Max Baucus (left) with a focus on revenues; witnesses for the hearing have not yet been released, though both Senators Baucus (D-Mont.) and Orrin Hatch (R-Utah) are slated to deliver statements. (This hearing has been postponed.-Ed.)

Meanwhile, the Gang of Six, a bipartisan coalition of top Democrat and Republican Senators seeking a solution to the debt-ceiling limit through deficit-reduction measures and led by Vice President Biden, has reportedly agreed on $20 billion a year in farm subsidy reductions. A congressional staffer close to the talks told the Fiscal Times the cuts were “an early area of agreement for this group trying to establish common ground.”

Competition among Republican contenders in the race for president may be exerting influence on what is politically possible. Two weeks ago, Minnesota Governor Tim Pawlenty (R-Minn.) hit the Iowa campaign trail with a call for an end to ethanol subsidies, an attention-getting move in a politically vital state where voters historically have sought support for the corn-based fuel. Former Massachusetts Governor Mitt Romney, the current Republican frontrunner, backs continuation of the subsidies.

Meanwhile, Treasury Secretary Timothy Geithner entered a lion’s den of opposition last Thursday in a meeting with House Republican freshmen, who are among the lawmakers most resistant to raising the federal debt ceiling without substantial budget cuts. Geithner cited Moody’s warning on Thursday of a possible downgrade to the United States’ credit rating to back his claim that failure to raise the debt ceiling will have catastrophic consequences. That follows an earlier speech in New York in which Geithner blamed the Republican-led Congress for not acting and "thus forcing the Treasury to deploy a series of extraordinary measures to prevent default."

The United States hit its $14.3 trillion debt limit on May 16, and Geithner has given an August 2 deadline before he says the U.S. will run out of funding for current obligations. Republicans, led by Senator Pat Toomey (R-Penn.), have argued that missing the August deadline would not lead to default.“ The money needed to stay current on our debt is on the order of a little over $200 billion,” said Toomey in a speech last month to the American Enterprise Institute. “So we’ve got about 10 times the revenue needed to avoid default on our debt.” Toomey and House Republican Tom McClintock have co-sponsored a bill that would require the U.S. to pay creditors prior to any other obligations.

Exerting further pressure on lawmakers, a recent Gallup Poll reveals that 47% of respondents oppose a debt-ceiling increase while only 19% support it.

With presidential campaigning — and even a widely publicized bus tour from former Alaska Governor Sarah Palin, who has not declared presidential aspirations — gearing up, the next volley in the fight over the debt ceiling could just as well come from Iowa as from Vice President Biden. But for now the scene shifts to the Dirksen Senate Office Building, where Finance Committee Chair, Senator Max Baucus (D-Mont.), will hold hearings Tuesday. Expectations for posturing exceed those for progress towards a bipartisan agreement.

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